The Next-Generation Zero Knowledge Solution
Lightning-Fast and User-Friendly Verification for DApp Platforms
International
4 members
Started in 2023
and tokens due to the NDA purposes.
About a Project
Our client, the B2B payment infrastructure, embarked on an exciting journey to help businesses onboard customers into the ever-evolving world of Web3 projects while enabling them to make payments directly with their bank cards.
Project goals
The primary project goal was to assist our client in achieving a next-generation Zero Knowledge (ZK) solution for user identification within decentralized applications (DApps) in just two months.
To bring this to life, the aim was to enable users to provide their personal information just once through a KYC provider and receive Soulbound Tokens (SBT) directly into their wallet. These tokens would then serve as the key to user verification.
This Zero Knowledge solution is intended to address scenarios where there is no centralized application, relying instead on zero-knowledge proofs. Our client’s intent was to extend this solution to its partners, so that they would use the solution for their own user verification processes.
Trend
The technology they acquired excels at identifying user details across various platforms, distinguishing between humans and bots, verifying age, location, and more. In short, it’s a great solution for verification, specifically in generating ZK proofs to confirm a user’s authorization for transactions on the platform while preserving their data confidentiality.
Our client foresaw the need to align with potential future requirements from European regulators. These requirements aimed at attaching user-specific personal information to each transaction for all non-custodial wallet owners. In a nutshell, our client aimed to have this solution well in place well before such requirements became standard practice.
In essence, our client aspired to set a precedent for business interaction with cutting-edge ZK technology. They envisioned becoming a tool approved by regulators, leading the way in using ZK for regulatory compliance.
What Problem Does the Solution Solve and
What is the Novelty of the Solution
For wallet owners, the idea of going through Know Your Customer (KYC) procedures with each transaction is less than ideal. It’s time-consuming and far from the best user experience. This gets even trickier because different KYC providers may have distinct procedures.
The result? Various platforms end up losing customers at this crucial stage. This experience not only affects conversion rates but also has a negative impact on the sales funnel, ultimately impeding revenue generation.
Business Challenges
Lack of expertise
The first business challenge our client faced was the lack of ZK expertise. They invested significant time and resources searching for expertise in this field, all while having little to no in-house ZK experience.
Adding to the complexity, they grappled with defining the specific expertise they needed. While they had a high-level understanding of their goal, but were less certain about the nuts and bolts of implementation and its impact on their business.
Resource limitations only added to their challenges. This not only made it tough to kick-start development but also hindered their ability to evaluate potential experts who could help bring their solution to life.
As a result, they reached out to us during the fifth month of their acceleration program, seeking critical insights into the immediate implementation of ZK proofs.
Tight deadlines
Another significant business challenge was the tight deadline — just two months. This was driven by the need to create a solution quickly for a demo presentation to an investor.
In just one month, we delivered a Proof of Concept (PoC) to the client, and within another month, we developed a solution. Afterward, we successfully handed over the work to the client.
Technical Challenges
We faced a compelling challenge – to engineer a smart solution that could meet the critical requirement for reusability.
Our client entrusted us with their hopes, counting on our expertise to thoroughly explore the world of ZK and offer effective solutions. In particular, we needed to tackle two key aspects:
- Securing User Data: We grappled with the puzzle of securely storing user data on our client’s side, leveraging their relevant licenses.
- Privacy-Preserving Proofs: The second aspect involved the intricate task of generating proofs on facts, such as age verification, without the necessity of sharing this sensitive information with various DApp partners. Here, we needed to find a solution that both safeguarded user privacy and facilitated seamless verification.
Work Done
A convenient browser extension with the Self-Sovereign Identity (SSI) model that allows one to do away with the tedious process of verifying each transaction.
Increased Convenience and Comfort
The first business challenge our client faced was the lack of ZK expertise. They invested significant time and resources searching for expertise in this field, all while having little to no in-house ZK experience.
Adding to the complexity, they grappled with defining the specific expertise they needed. While they had a high-level understanding of their goal, but were less certain about the nuts and bolts of implementation and its impact on their business.
Resource limitations only added to their challenges. This not only made it tough to kick-start development but also hindered their ability to evaluate potential experts who could help bring their solution to life.
As a result, they reached out to us during the fifth month of their acceleration program, seeking critical insights into the immediate implementation of ZK proofs.
Pioneering Innovation in the Market
Another significant business challenge was the tight deadline — just two months. This was driven by the need to create a solution quickly for a demo presentation to an investor.
In just one month, we delivered a Proof of Concept (PoC) to the client, and within another month, we developed a solution. Afterward, we successfully handed over the work to the client.
Key Results
Startup Valuation Have Risen from $5 to $12 Million
The initial valuation of the company hovered around $1 million when our client became a partner with one of the largest accelerators, which also collaborated with Polygon ID—one of the few solutions for Zero Knowledge Identity.
After a thorough evaluation and our work on Zero Knowledge, where we aimed at retaining users without the burden of complex and tedious verification procedures for each transaction, investors were highly impressed by the ZK solution. As a result, the product’s investment attractiveness skyrocketed, one fund assessed our client’s company at $5 million, while another valued it at an impressive $12 million.
This remarkable and unexpected outcome showcased our client’s effective approach to capturing the attention of the web3 audience, leveraging ZK for its simplicity and convenience.
Attracting New Partners
Following the product announcement, big players in the market, such as Polkadot, Concordium, and Near Blockchain, expressed a keen interest in integrating with our client.
Work process
Research
Our work began with a comprehensive research phase, which aligns with our standard approach. The primary goal was to validate the feasibility of our client’s concept and to confirm the solution’s practicality and potential for reusability before moving into full-scale development.
During the discovery phase, we delved into our client’s business objectives.
Development and Overcoming the Polygon ID Challenge
One of the primary challenges we encountered was the scarcity of similar cases or products in the market, particularly those designed for client-server architecture. Existing solutions often require users to install apps for verification, which have a negative impact on the conversion funnel.
For example, we considered utilizing Polygon ID as a solution to store and verify user information. However, the drawback was that Polygon ID stored data on the user’s device, whereas our client required a KYC solution that securely stored data on their own servers.
To address this issue, we implemented a solution by integrating Polygon ID on the client’s server-side. Instead of adopting the traditional mobile app flow integration, our specialists took a different approach. They modified the library’s source code, revised data storage methods, and refined interaction procedures. This resulted in a server-based version of Polygon ID, where the database served as primary storage for Personal Identifiable Information (PII).
Assistance in Preparing for Demo Day for Investors
In addition to our core development work, we played a crucial role in helping our client prepare for their investor demo day. This support encompassed a range of activities:
- Material Preparation: We actively contributed to the creation of essential materials for the demo day. This included crafting impactful presentations and illustrative diagrams, ensuring that the core message about the Zero Knowledge solution was effectively conveyed to potential investors.
- CEO’s Message: We took an active part in the preparation of the CEO’s communication. Drafting and sending out these messages helped the CEO to convey the vision, mission, and achievements of the project effectively, ensuring a clear and compelling narrative during the investor presentation.
- Zero Knowledge Education: Recognizing the significance of Zero Knowledge technology for the success of the project, we held regular educational sessions. These sessions were designed to educate the CEO and the Product Manager with a deeper understanding of Zero Knowledge and its implications. By ensuring everyone involved had a strong grasp of this technology, we contributed to more confident and informed decision-making, a key factor in securing investor interest and support.
Communication
Given the complexity of the project, we implemented various communication practices to ensure a seamless collaboration with our client:
- 24/7 Communication: To meet the demanding deadlines and maintain transparency in our development progress, we ensured round-the-clock accessibility to our client. This accessibility extended beyond the agreed-upon periods, practically offering 24/7 support.
- Regular brainstorming: The uniqueness of the solution required frequent brainstorming sessions with the client’s team to find unconventional and user-friendly solutions.
- Miro orientation: We used Miro to familiarize our client with the technical aspects and different stages of the development process.
Offboarding
Our aim was to provide a solution to the client that they can further develop and refine in-house if necessary. Thanks to streamlined development processes and effective communication, we went through this stage seamlessly with the client.
Testing and Auditing
After the initial development phase, we collaborated with the client’s team for comprehensive testing to ensure all features functioned as expected. A security audit was also conducted externally to confirm the platform’s safety.
Knowledge Transfer
Following our standard processes, we organized knowledge transfer sessions to equip the client’s in-house team with knowledge about the product. These sessions were designed to allow the client’s team to continue developing and enhancing the product.
Customer Review
Our experience with outsourcing was not new, but working with Redsteep revealed a remarkable level of transparency in development. We were genuinely impressed by the depth of expertise they brought to the table. What truly stood out was the consistently high-quality processes and communication. Every technical decision was well-justified by their team of specialists, often accompanied by clear diagrams that made complex concepts easily understandable at a business level. Their approach to reporting, adjusting priorities, and handling tickets worked seamlessly. It was a top-notch experience.
Our Approach is To Translate Into
the Business Language of Each Task
In our paradigm, a task is never isolated from its technical context. Every task can be aligned with a target product metric it influences. For any task, a chain of sub-tasks can be created, mapping the resources and metrics that transition from the technical to the business domain, ultimately connecting with Objectives and Key Results (OKRs).
For example: Product OKR — Release 100 ZeroID by the next month.
Technical Task in the Sprint: Address all high-severity backend errors.
Metric Chain: Number of high-severity backend errors (reduction) -> Server downtime due to restarts (reduction) -> Number of users accessing the ZeroID working widget (funnel entry, increase) -> Number of users issuing ZeroID to their wallets (increase).
This illustrates how the initial task directly impacts the OKR to «release 100 ZeroID by the next month.» Typically, this is visualized graphically in tools like Miro during daily meetings.
In Conclusion
In just two months, we successfully delivered a functional ZK solution to our client, enabling lightning-fast and user-friendly verification for DApps platforms. The speed and convenience of this solution undeniably contribute to increased conversion rates for platforms. This value is not only evident in the increased interest from our client’s partners but also in the substantial increase in their company’s valuation.